World

Celebrity tax dodging prompts calls for crackdown in Germany

BERLIN (Reuters) - Revelations that prominent Germans have for years hoarded cash in secret bank accounts have prompted calls from Chancellor Angela Merkel's Social Democrat (SPD) coalition partners for a clampdown on tax dodging.

Germany's front pages have been dominated by in recent days by public confessions from feminist activist Alice Schwarzer and Berlin city's Culture Minister Andre Schmitz about tax evasion.

These follow a scandal over Bayern Munich soccer club president Uli Hoeness who is to stand trial for tax evasion in March, a case that has shocked Germans and raised the pressure on Finance Minister Wolfgang Schaeuble to act.

"If it becomes known that there are tax dodgers in the intellectual establishment, it points to a much bigger number of unreported cases than previously assumed," senior Social Democrat Thomas Oppermann told Spiegel Online.

He said Germany should urgently step up its search for tax dodgers and said he wanted to review and possibly change the system that grants amnesty to people who report themselves.

"I expect the German government to actively push the subject of tax evasion on all international levels, as agreed in the coalition deal," said Oppermann, in comments echoed by other lawmakers.

"ROLE MODELS"

The SPD has championed the fight against tax evasion and the coalition deal with Merkel's conservatives states that the new right-left government will push ahead with efforts to fight it. It is, however, short on detail.

Schaeuble negotiated a tax deal with Switzerland in 2011 but the SPD, then in opposition, blocked it, arguing it did not go far enough as it would have protected the anonymity of German account holders while imposing a tax on their assets.

That deal would have netted Germany tax revenues of 2 billion euros or more, Merkel has said. Most of that would have gone to Germany's 16 states.

The EU's six biggest countries agreed last year to work more closely together to put pressure on tax havens.

In an effort to stop the Schmitz case damaging his party, SPD Chairman Sigmar Gabriel, who is also Germany's vice-chancellor in the coalition, made clear he would not tolerate dodgers even if they were allies.

"Representatives of the SPD must be role models," he said.

Schmitz, a close ally of SPD Berlin mayor Klaus Wowereit, said he had "made a grave mistake which I very much regret" in not paying taxes on a Swiss account.

The matter reflects badly on Wowereit, who knew that proceedings had been initiated against Schmitz but then halted in 2012. The mayor is already under pressure over lengthy delays

and ballooning costs for Berlin's new airport.

Feminist Schwarzer, an anti-pornography campaigner seen by feminists as a moral authority, made a statement on her website on Sunday saying she had paid back 200,000 euros in taxes plus default interest to the authorities for the last decade.

Some German states have bought CDs with tax data from Switzerland, which has led to a surge in the number of people turning themselves in and remaining unpunished.